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2023 PFA Corporate and Pension Fund Accounts for the year ended December 2022 – Veritas Glanvills Pensions

Background.

Veritas Glanvills Pensions Limited is also known as VG Pensions Limited.

As of 31 December 2021, Veritas Glanvills Pensions had shareholders’ funds of ₦4.22 billion, and had recapitalised by the deadline of the last regulator-induced recapitalisation exercise. As of December 31, 2022, the company had increased its shareholders' funds to close at just slightly over ₦6.01 billion.

Analysis:

Veritas Glanvills Pensions ended the 2022 financial year with 156,279 RSA holders in the 7 publicly available RSA funds, an increase of 5,592 RSA holders from 150,687 in 2021. Additionally, assets under management for the 7 audited Retirement Savings Accounts (RSAs) funds published was ₦118.78 billion, up 18% from ₦100.72 billion in 2021.

Performance Analysis: Company

Company revenue for the year ended December 31, 2022, was up 47% to ₦2.0 billion, compared to ₦1.36 billion in 2021. Total expenses rose almost 31% to ₦1.43 billion, from ₦1.10 billion in 2021, with cost-to-income ratio falling to 72% from 80%, the lowest of the last 6 years. The 5-year average is 89%.

The company made profit after tax of ₦444.26 million for 2022, up 107% from ₦214.49 million, and shareholders' funds grew to ₦6.01 billion in 2022 from ₦4.22 billion in 2021. Return on equity was 7.40% for 2022, 5.08% in 2021.

Performance Highlights: Veritas Glanvills RSA Funds (audited)

For the year ended 31 December 2022, the Veritas Glanvills Pensions Fund I appreciated by 9.75%, Fund II appreciated by 10.62%, Fund III by 11.36%, Fund IV by 11.34%, Fund V by 13.20%, Fund VI – Non-Interest (Active) by 10.39% and Fund VI – Non-Interest (Retiree) by 10.10%. Veritas Glanvills Pensions offers all 7 of the PenCom approved funds to the public.

The pension industry does not currently benchmark the performance of any fund to any performance index. In the absence of any benchmark index to measure/compare fund performances for the year 2022, and to aid readers indirect comparison, the NGX All-Share Index (a measure of performance of the Nigerian stock market) appreciated by 19.98%, the NGX Pension Index appreciated by 16.96%, inflation was 21.47% and MPR closed the year at 16.50%, having risen steadily through the year. 

Veritas Glanvills Pensions Fund I highlights:

·      Fund performance: up 9.75% in 2022, higher than the 5.18% in 2021 but lower than the 37.76% in 2020.

·      Fund income was up 158% to ₦51.60 million in 2022, from ₦20.01 million in 2021 and ₦26.55 million in 2020.

·      Net gains from investing activities rose 224% to ₦40.89 million in 2022, up from ₦12.64 million in 2021 and ₦23.84 million in 2020.

·      Fund size: the size of the fund, measured by net assets, grew 130% to ₦715.54 million from ₦360.63 million in 2021.

·      Fund expense ratio (cost of managing the fund) was 1.50% in 2022, down from 2.37% in 2021, also down on the 1.78% of 2020, a step in the right direction.

·       Asset Allocation (31-12-2022): Fixed Income Instruments 72.68% (2021: 89.57%), Equities 2.20% (2021: 7.75%), Money Market instruments 18.19% (2021: 1.02%), Cash 0.00% (2021: 0.00), Others 6.93% (2021: 1.66%).

·      Performance ranking: The fund performance for 2021 was ranked 14 out of 19 in our 2022 Annual Report on Pensions.

Veritas Glanvills Pensions Fund II highlights:

·      Fund performance: up 10.62% in 2022, compared to 7.43% in 2021 and 19.68% in 2020 and a 5-year average of 13.00%.

·      Fund income was up almost 29% to ₦8.50 billion in 2022. Though this was up on the ₦6.59 billion in 2021, it was below the ₦10.72 billion in 2020.

·      Net gains from investing activities was ₦7.13 billion in 2022, up 29% in 2021 which was ₦4.43 billion but ₦9.77 billion in 2020.

·      Fund size: Fund II grew almost 14% to ₦74.33 billion from ₦65.48 billion in 2021 and ₦58.44 billion in 2020.

·      Fund expense ratio: Cost of managing the fund in 2022 was 1.84% in 2022, down on the 3.29% in 2021 but higher than the 1.63% in 2020.

·   Asset Allocation (31-12-2022): Fixed Income Instruments 83.82% (2021: 82.06%), Equities 5.38% (2021: 10.24%), Money Market instruments 6.87% (2021: 4.86%), Cash 0.00% (2021: 0.00), Others 3.93% (2021: 0.41%).

·      Performance ranking: The fund performance for 2021 was ranked 18 out of 19 in our 2022 Annual Report on Pensions.

Veritas Glanvills Pensions Fund III highlights:

·      Fund performance: was 11.36% in 2022, compared to 7.63% in 2021 and 17.84% in 2020 and a 5-year average of 11.28%.

·      Fund income was up 48% to ₦3.49 billion in 2022 from ₦2.36 billion in 2021 and ₦3.43 billion in 2020.

·      Net gains from investing activities in 2022 was ₦3.01 billion, up 82% from ₦1.65 billion in 2021. 2020 was ₦3.13 billion.

·      Fund size: Fund III grew 27% to ₦31.50 billion from ₦24.75 billion in 2021 and ₦21.26 billion in 2020.

·      Fund expense ratio was down to 1.55% in 2022, from 2.86% in 2021 but higher than the 1.40% in 2020. The fund has a 5 year average of 1.64%. The lower this ratio the better for RSA holders.

·   Asset Allocation (31-12-2022): Fixed Income Instruments 89.03% (2021: 89.57%), Equities 2.47% (2021: 7.75%), Money Market instruments 7.62% (2021: 1.02%), Cash 0.00% (2021: 0.00), Others 0.88% (2021: 1.66%).

·      Performance ranking: The fund performance for 2021 was ranked 12 out of 19 in our 2022 Annual Report on Pensions.